San Diego Business Journal

Microsoft Layoffs to Cut 378 Locally

By Mike Allen Sunday, July 20, 2014

Microsoft Corp. said it’s embarked on a restructuring that will cut 18,000 people over the next year, including 378 based at its Rancho Bernardo office that once belonged to Nokia, which Microsoft acquired in April for $7.5 billion.

According to Redmond, Wash.-based Microsoft, the restructuring is occurring “to simplify its organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy.”

Of the total number of employees being laid off, Microsoft said about 12,500 are related to Nokia, which had about 25,000 worldwide at the time the transaction was completed. The company began the layoffs July 17.

Microsoft said it expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million involving severance payments.

Microsoft CEO Satya Nadella, who replaced retired Steve Ballmer in February, said in an email to employees “the vast majority of employees whose jobs will be eliminated will be notified over the next six months.”

“My promise to you is that we will go through this process in the most thoughtful and transparent way possible,” Nadella said.

For its 2013 fiscal year ended June 30, 2013, Microsoft reported net income of nearly $22 billion on $78 billion in revenue.